Ditch the Resolutions: 7 Practical Financial Habits for the New Year

Ah, New Year’s resolutions – those lofty goals we set with the best intentions, only to watch them crumble faster than leftover holiday cookies. Let’s face it: life with kids is unpredictable. Adding rigid financial resolutions to the mix is a recipe for stress (especially if you’re a Type B parent like me).

Instead, let’s talk about some no-fuss financial habits that real families can start now to build wealth without the pressure cooker. Here are some practical steps that won’t make you tear your hair out.

In this article:

1.    Automate Your Personal Finances: Savings and Bill Paying

2.    Smart Streaming and Subscription Management

3.    Prioritize Debt Repayment

4.    Embrace Thrifting and Secondhand Shopping

5.    Cut Down On Food Expenses

6.    Teach Kids About Money

7.    Utilize Cash-Back and Reward Programs

1.    Automate Your Personal Finances: Savings and Bill Paying

Setting up automatic transfers to your savings accounts is like putting your finances on autopilot. Whether it’s $20 a week or $200 a month, automating savings takes human error out of the equation. It’s a simple, painless way to effortlessly grow for the financial trifecta:

• Building an emergency fund: Aim for three to six months’ worth of living expenses to create a cushion for unexpected costs like car repairs or medical bills.

• Investing for the future: If you’re new to investing, consider low-cost index funds or ETFs. Automating retirement contributions keeps us on track for a future where we’re not eating cat food in Golden Years.

• Planning for big expenses: Once your emergency fund is solid and you automate your retirement contributions, it’s time to funnel whatever you can into a “rainy day fund”– whether it’s a family vacation, back-to-school shopping, or upgrading the HVAC system.

Automating bill pay is another game-changer that takes the stress out of remembering due dates and avoiding late fees. Set it and forget it – your bills get paid on time, every time, without you having to lift a finger.

One smart move is to have a separate bill pay account for automatic payments that always has a buffer (like $100 to $500) so you don't get hit with overdraft or late payment fees. Then, reimburse the account every payday, which you can also automate.

I pay almost all our bills with a credit card (more on leveraging credit cards for rewards at the end), so I don’t have to worry about the amount in my bank account – just pay the credit card balance once a month, which is also set for automatic payment (have you noticed a theme yet?).

2.    Smart Streaming and Subscription Management

Subscriptions can quickly become a financial drain, but managing them smartly can save you a bundle. It’s easy to turn services on and off, so switch them up quarterly to catch the shows you want without paying for half a dozen services at once. Talk about financial parenting hacks that you can actually use.

And waiting for those end-of-year deals can really pay off! Like how I scored a holiday bundle for Hulu and Disney+ at $2.99/month for a year.

Also, look for ways to combine luxury services with necessities. For example, we get Apple+ and Netflix included for free through our T-Mobile cell phone plan and HBO for no additional charge from our AT&T internet.

3.    Prioritize Debt Repayment

Debt is the ultimate wealth killer, so tackling it should be a priority. Here are some smart repayment methods to consider:

• Snowball Method: This involves paying off your smallest debts first. It's perfect for those who need quick wins to stay motivated. Knocking out those little balances one by one can give you a sense of accomplishment and keep you pumped to tackle bigger debts.

• Avalanche Method: This focuses on paying off debts with the highest interest rates first. It's the best choice if you're looking to save money in the long run. By eliminating the most expensive debts first, you’ll reduce the total interest paid over time, keeping more of your hard-earned cash.

• Lower Your Credit Utilization: Focus on paying down your credit cards with the highest credit utilization – the highest percentage of the credit limit being used. This method is especially beneficial if you're aiming to boost your credit score. Credit utilization plays a big role in your credit score, so reducing those balances can give your score a nice lift while you pay down debt.

• Debt Consolidation: This involves using a special loan or credit card to combine multiple debts, like credit card balances, into one monthly payment, ideally at a lower interest rate. It’s great if you're struggling to manage multiple payments or want to reduce the interest you’re paying. However, be cautious – not all types of debt are good for consolidation. For example, federal student loans often come with benefits like deferment that you can't use once they're consolidated with other debts.

By choosing the method that best suits your situation, you can take control of your debt and start paving the way to financial freedom.

4.    Embrace Thrifting and Secondhand Shopping

Kids outgrow clothes faster than you can say 'growth spurt.' Instead of dropping a fortune on brand-new outfits, hit up thrift stores, consignment shops, and online secondhand markets. You’ll find quality items at a fraction of the cost and maybe even score some designer duds.

5.    Cut Down On Food Expenses

Food is a big part of our budgets and our lives. For busy parents, managing affordable meals with limited time can feel like a juggling act. But there are ways to cut costs without sacrificing your sanity or your family’s happiness.

Eat at Home Without Spending More Time in The Kitchen

We all know that eating out drains the wallet faster than you can say “extra guac” but who has the time or energy to cook after a long day of work and wrangling kids?

On those crazy busy nights, compromise with ready-made meals from the grocery store. They’re often cheaper than restaurant meals and can be healthier too. Think rotisserie chicken, pre-chopped veggies, or heat-and-eat meals that save time and money.

Meal Planning Tips For Beginners

#MealPrepSunday sounds so organized and Pinterest-worthy, but it can also feel like a chore. Here’s how meal prep can be as good in practice as it is in theory:

• Plan with Flexibility: Start by planning a few meals you know your family loves, but be ready to switch things up. Have backup ingredients for quick, no-cook meals like salads, wraps, or sandwiches that can save the day when your plan goes awry.

• Batch Cooking: Cook larger portions of your family’s favorite meals and freeze them in individual portions. This way, you have homemade “ready-made” meals that can be quickly heated up without resorting to takeout.

• Mix and Match: Prep versatile ingredients like grilled chicken, roasted veggies, and cooked grains that can be mixed and matched throughout the week. This keeps meals interesting and prevents the dreaded Friday night repeat of Sunday’s dinner.

• Use Affordable Ingredients: Stick to budget-friendly staples like beans, rice, pasta, and seasonal veggies. These can be the base for a variety of meals without breaking the bank.

You don’t need to be a meal prep perfectionist – just find what works for your family and keep it simple.

Save Money With Bulk Buying

Buying in bulk can mean savings for your wallet, but be cautious with perishables – we're all guilty of buying that healthy produce with good intentions only to watch it rot in the fridge. Unless your family can eat five pounds of bananas before they go bad, stick to non-perishables.

And if you do end up with more food than you can handle, try freezing leftovers for another day. This can prevent waste and save you from cooking another night.

Finding a compromise that works for your wallet and your lifestyle is key. Every family is different, and there’s no one-size-fits-all solution. The goal is to spend less on food without adding stress to your life.

6.    Teach Kids About Money

Like teaching your child emotional regularity, start healthy financial habits young. Involve your kids in age-appropriate money discussions. Use tools like allowance apps or simple piggy banks to help older kids grasp the value of saving, budgeting, and making wise spending choices.

My 1.5-year-old son already has a clear piggy bank for cash gifts. Even though he has no concept of money, he does understand “more” and enjoys seeing the money fall. The idea is that when he’s old enough to appreciate it, he’ll have a head start on understanding money management.

7.    Utilize Cash-Back and Reward Programs

This is where saving money gets a little more fun. Utilizing cash-back and reward programs is like getting a bonus for buying the stuff you need anyway. However, no rewards are worth getting yourself into debt, so only utilize this habit if you can pay your entire balance every month.

Here’s how you can make these programs work for you.

• Cash-Back Credit Cards: If you’re disciplined with your spending, a cash-back credit card can be a goldmine. Use it for everyday purchases – groceries, gas, bills – and watch the rewards roll in. It’s like getting a little refund every time you swipe.

• Extra Perks: Points can also help pay for extras like vacations or even electronics. I got my Apple laptop and desktop for free by cashing in my Chase points. It’s a great way to treat yourself and your family without breaking the bank.

• Reward Programs: Sign up for reward programs at the stores you frequent. Many grocery stores, pharmacies, and even gas stations offer loyalty programs that give you points or discounts. It might seem small, but those savings add up over time.

By leveraging cash-back and reward programs, you’re not just saving money – you’re making your money work harder for you. So go ahead, get savvy with those rewards, and start stacking up the savings.

Your future self (and your kids and grandkids) will thank you. Just make sure to pay off the balance in full each month to avoid interest charges.